Something for everyone at a checkout counter near you—at least that’s the choice consumers have in paying for goods and services. The following article presents an overview of payment types and the evolutionary path from cash to card to digital.
Merchants need to prepare for big changes as more consumers move away from magnetic stripe credit cards. That’s according to Owen Britton Jennings, head of business intelligence at Square, who this week led the webinar “The Decline of Magstripe Cards–and What That Means for Your Business” at National Small Business Week in Washington, D.C.
Jennings spoke about the recent changes to payment technology, the “sunset” of magstripe cards, and the implications of those changes for small business owners. Here is a summary of his thoughts on the industry and tips for taking the changes in step.
Of the millions of credit card transactions handled by two million Square sellers, the number of EMV cards used rose from 12% in January 2015 to more than 50% in December, and it has continued to increase year to date. “Full migration” to chip cards occurs both on the consumer side with card registration and usage, and on the business side in terms of upgrading terminal hardware. For other countries, fully implementing these card technology changes has taken about 3 to 5 years.
Square data shows that between 40% to 50% of all terminals in the U.S. have been upgraded to accept new payment technology but not all have been enabled.
In choosing whether or not to upgrade terminals to accept the EMV and NFC technology, Jennings urged businesses to consider what would result in the best customer experience as you grow and scale operations.
Merchants currently face a sea of complexity in dealing with a fire hose volume of payments processing information and solutions from acquirers and payments facilitators. Also, many consumers are baffled when asked to step out of their familiar routine of simply swiping a credit card when requested, and to dip a chip card and enter a PIN. Don’t even think about how they try to deal with mobile wallets. But the payments world is still better off now than the days of “Cash or Credit?” Sign here, please.
Overview by Raymond Pucci, Associate Director, Research Service at Mercator Advisory Group
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